To The Moon

• West Texas Intermediate (WTI$W&T Offshore(WTI)$) for March delivery advanced 2% to $87.30 a barrel.
• Brent$Brent Last Day Financial - main 2203(BZmain)$ for March settlement rose 2% to$89.97 a barrel at 10:50 a.m. in New York.

The rising prices of crude oil

Inventories at the largest U.S. oil hub fell by 1.8 million barrels for the third week in a row. The oil price has surged in recent days, signaling tight supply.

Prices are also moving on mounting concern over a possible Russian incursion into Ukraine. A potential conflict carries large risks for financial markets — especially energy commodities such as natural gas and oil.

Looking at stocks, we can see in the last 1 month, the prices of stocks in the energy sector have seen uniform growth. SLB$Schlumberger(SLB)$ , HAL$Halliburton(HAL)$ have risen more than 30% in a month. COP$ConocoPhillips(COP)$ , EOG$EOG Resources(EOG)$ , MRO$Marathon(MRO)$ and XOM$Exxon Mobil(XOM)$ have risen near 20%.

Bullish Factors vs. Bearish Factors

Bullish:

1. Powell said U.S. labor market conditions are consistent with full employment

According to labor market data, the US' national unemployment rate has fallen for six months, and more than 6 million people have gotten jobs in 2021.

Powell claimed the Fed was going to raise interest rates in March and it would shrink its balance sheet after the first rate hike to end its ultra-loose monetary policy to combat inflation.

      2. Rising tensions in the Russia-Ukraine conflict

Russia is one of the world's largest oil exporters. Energy market prices rose on concerns that Russian gas supplies to Europe could be disrupted.

      3. New oil leak off Peru coast amid crude spill cleanup

Bearish

1. U.S. crude, gasoline stocks build, even as fuel demand surges

Crude inventories (USOILC=ECI) rose by 2.4 million barrels in the week to Jan. 21 to 416.2 million barrels. U.S. crude oil and gasoline inventories rose last week, alleviating a bit of the market's concerns about supply.

      2. Russia Sees Nuclear Deal Being Reached Next Month: Iran Snapshot

The pact would probably include the lifting of oil sanctions on the Islamic Republic and be put into effect by Apri.

      3. OPEC+ Delegates Expect to Ratify Plan for Modest Output Hike

OPEC and its allies are expected by delegates to stick to their plan and ratify another modest production increase next week as they try to satisfy rebounding oil demand.

Crude Oil Price Analysis

From the technical analysis point of view, a correction is discernible. Crude, in this case, Brent oil, is extremely overbought on all time-frames, especially on a weekly chart.

From the chart, you might notice a divergence between the price action and the RSI movement. MACD has also been volatile since April 2021,. The signal and MACD lines are since then heading downwards, whereas the price is heading upwards.

The same is noticed with RSI, which in technical analysis signals a steep correction ahead. Brent oil is completing a 5-wave move finishing the expanding diagonal formation.

Related stocks you may interested in:

1. APA$APA Corporation(APA)$

The company has widely distributed assets that give it exposure to various petroleum basins, all of which contain unique opportunities and challenges.

For the most recent quarter, APA was expected to post earnings of $0.89 per share, but it reported $0.98 per share instead, representing a surprise beat of 10.11%. For the previous quarter, the consensus estimate was $0.54 per share, while it actually reported $0.70 per share, a surprise of 29.63%.

      2. MRO$Marathon(MRO)$

Marathon Oil Corporation operates as an independent exploration and production company in the United States and internationally.

Barclays analyst Jeanine Wai increased the price target on Marathon Oil to $20 from $18. And Wai is maintaining an “Overweight” rating on the shares.

      3. CVE$Cenovus(CVE)$

Cenovus Energy Inc (CVE) is a top integrated Oil & Gas company.

CVE received an overall rating of 68, which means that it scores higher than 68 percent of all stocks. Cenovus Energy Inc also achieved a score of 83 in the Oil & Gas Integrated industry. Oil & Gas Integrated is ranked 20 out of 148 industries.

SHARE YOUR THOUGHTS:

• With the stock markets' recent decline, do you think the price of crude oil will continue the uptrend?
• What's your opinion about the Russia-Ukraine conflict's influence on the whole market?
• Do you think the stocks mentioned in this article are a good choice?

Want to read more analysis, click the following links:

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